When most people consider doing home renovations, the first thought is the costs involved. Some rooms, like the kitchen and bathroom, tend to be more costly than other areas of the home. These rooms also add more resale value, making them a focal point for home improvements.
Fortunately, you can renovate your bathroom without putting too much stress on your credit. In fact, you can even use this opportunity to improve your credit score. Here are the top three ways to increase your credit reputation while undertaking a bathroom renovation.
Get a Home Improvement Credit Card or Loan
One of the best ways to finance your bathroom upgrade is to get a credit card from a local home improvement retailer. Many home improvement retailers offer credit cards with added bonuses for purchasing equipment and supplies from their store. These bonuses might offer additional savings or other adjacent benefits.
Depending on your credit score and the scope of your project, you might also be eligible for a line of credit.
As your credit score impacts whether you’ll get approval for your loan and the interest rates you’re charged, you should review your credit report before you apply. Determine whether there are negative items affecting your score and take steps to rectify them. You can file disputes to get collections removed from your credit report, which will cause your score to rise.
Using credit and making payments on time will also help improve your credit report, showing future borrowers that you’re a low risk.
Practice Responsible Borrowing
If you decide to use credit to finance your bathroom project, prioritize healthy financial habits. Set a strict budget for your renovation and stick to it, making cuts as needed. Shop around for deals and allow yourself time to pay down what you’ve borrowed rather than max everything out.
Your borrowing habits impact your credit score, and responsibility will go a long way to boost your ratings. Even during tough months, commit to making your minimum payments on time with extra as possible. It’s worth cutting back on your budget in other areas of your life to ensure you’re paying down your debt. The bigger the gap between how much you owe versus your loan maximum, the better your score will be.
The key thing to remember when borrowing to finance your bathroom upgrade is not to spend the money just because it’s there. Consider extending your renovation timeline to pick away at the project, and don’t over-extend yourself. Be sure to understand the terms of your borrowing agreement and adhere to the regulations put in place.
Use Rebates and Grants
Finally, consider other financing options to minimize how much debt you take on while completing your renovations. If you have an older bathroom, chances are your plumbing is out of date and unsustainable. Upgrading toilets and faucets for low-flow versions and aerators will help you cut back on your water consumption. In addition to offering savings on your utility bills, this upgrade may also be eligible for a grant or rebate.
There are many home upgrade rebate programs available. The government has various programs to upgrade to solar water heaters and improve insulation throughout the home, which could benefit your bathroom renovation budget. You can also use a water rebate finder to source additional programs in your area for faucet and toilet upgrades.
With these three strategies, you can improve your credit score while completing bathroom renovations. Dedicate time to deal shopping, finding the best borrowing option, and monitoring your credit report accordingly.